Refinancing your mortgage can be a very wise decision, especially when the timing is right. We have seen some really low interest rates in 2017, and savvy homeowners are taking advantage with a refi from Transparent Mortgage. Refinancing your home can lead to a new 30-year fixed loan (or even a 15-year fixed mortgage option) with better terms and lower payment. It can remove private mortgage insurance (PMI). You can possibly cash out some equity as well.
Here are some home refinancing tips that will help you make the right mortgage decisions:
1. Be Prepared
Mortgage interest rates are tied directly to the economy, which means they can and will fluctuate. You need to be ready with your paperwork, a good credit score and prepared loan applications. You may even want to submit your application in advance for pre-approval, and then wait to lock in the rate when the timing is right.
2. Consult a Mortgage Professional
There are many reasons why you’ll want to talk with your mortgage representative before deciding to refinance your home. Then, they can help you make sound financial decisions throughout the loan process, so you can lock in the best interest rate, have more favorable loan terms and do what’s best for your financial future.
3. Study Your Home’s Value
The value used on your application can impact loans terms and you want to have an educated idea here and be conservative if possible. Some brokers/lenders will be able to help you check comparables to determine what is a reasonable appraised value to expect for your home.
4. Consider Your Options
Talk with your loan representative about 30-year fixed loans, 15-year fixed loans and ARMs (adjustable rate mortgages) as well as options to remove Mortgage Insurance (PMI) if you are currently paying it. Figure out which option is best for your financial situation and which will provide the most benefits, weighing both the short-term and long-term.
5. Consider Paying Discount Fees (points) or Taking Advantage of Lender Credits (premium pricing)
When you pay discount fees on your mortgage, you’ll be able to permanently lower the interest rate. Conversely, going with an above par interest rate can you get a cash rebate in the form of the lender credit that can be used to offset closing costs. If you are more longer term focused the lower rate is more valuable, and shorter term focused homeowners will want to keep closing costs down and are more likely to go for the lender credit pricing option.
6. Bird in Hand is Worth Two in the Bush
When interest rates are low enough to generate the financial benefit you desire, make your move. Rates can move up quickly and waiting can be costly. Choosing a mortgage professional with expertise in financial markets can help you make an informed and empowered decision.
If you are thinking about refinancing your home in San Diego or the surrounding Southern California region, call the team at Transparent Mortgage today. Let our mortgage experts walk you through the process and help you get the most out of your refi. Contact us today at (619) 929-0199.